We Talk Strategy

Add on Items

Back when Amazon Prime first started, I liked it for convenient shipping. They’ve since added a lot to the Prime package. I was initially worried that the shipping combined with 1-click ordering would result in too many impulse purchases. In fact, I didn’t turn on 1-click for a while after I subscribed to Prime. It didn’t actually happen.

The flip side, back when Amazon listed Prime as on a trial basis, was a worry that Amazon would cancel the program because people would grab one cheap item at a time because it was easy with Prime and 1-click. Amazon got much better about combining orders that hadn’t shipped yet. After adding all these features to Prime, they couldn’t really just cancel it. I suppose they could just remove the shipping features now, but that would be a PR nightmare. Mostly they’ve managed the problem by limiting items eligible for Prime. It seems like they’ve relaxed that in recent years.

Strategically, I find their new solution interesting. Now, a bunch of smaller items have been labeled ‘add on’ items. You can’t just purchase them alone. There might be a secret back door way that I haven’t figured out, but the system is designed to get you to buy $25 worth of Amazon items before you can place the order for the add on item. Obviously, third party items don’t count.

I’m not sure if it is a genius or stupid move. On the stupid side, you’re making it harder to purchase some items and emphasizing the limits of Prime. On the genius side, you’re stopping people from buying items that lose Amazon money and encouraging customers to buy more at once. It will be interest (perhaps only to me) to see how it plays out.